How Should Legal Fees for an Acquisition Be Treated

question 2

Multiple Choice

How should legal fees for an acquisition be treated?

• A)Capitalized as part of the acquisition cost.
• B)Expensed in the period of acquisition.
• C)Deferred and amortized.
• D)Deferred until the company is disposed of or wound-up.

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Definitions:

Unequivocal

Clear and unambiguous, leaving no room for doubt or confusion.

Reasonable, Lawful

Actions or decisions that are made with rational justification and comply with established laws.

Legal Framework

The structure of laws, regulations, and rules that govern a particular area or activity.

Reasonably Assured Expectations

The anticipation of benefits or rights that a reasonable person would consider as likely to happen under a contractual agreement.